Exploring Excel 2003 Revised - Grauer and Barber 1 Committed to Shaping the Next Generation of IT Experts. Chapter 4: Spreadsheets in Decision Making:

Exploring Excel 2003 Revised - Grauer and Barber 1Committed to Shaping the Next Generation of IT Experts.

Chapter 4: Spreadsheets in Decision Making: What If?

Robert Grauer and Maryann Barber

Exploring Microsoft Excel 2003

Revised Edition

Exploring Excel 2003 Revised - Grauer and Barber 2

Objectives

Use the PMT function to calculate the payment of a car loan or mortgage.

Use the FV function to determine the future value of a retirement account

Explain how the Goal Seek command facilitates the decision-making process

Use mixed references to vary two parameters in a table

Use the AVERAGE, MAX, MIN, and COUNT functions


Objectives (continued)

Use the IF and VLOOKUP functions to implement decision making

Freeze, unfreeze, hide, and unhide, rows and columns in a worksheet

Use the AutoFilter command to display selected records in a list

Describe the options in the Page Setup command used with large worksheets


Case Study: Bill’s Autos

In this case study, students create a flexible car payment calculator. They use the PMT function to determine the monthly payment. They then use mixed references to create a table showing the amount of the payment, given different amounts financed and interest rates.


Using Functions

Function – a predefined computational task Requires arguments

Values the function uses to calculate answers Returns a value


The PMT Function

Calculates a periodic payment, such as a car or mortgage payment

Based on: Amount financed Interest rate Number of periods


Using the PMT function

Interest rate divided by 12

Number of payments multiplied by 12

Amount financed expressed as a negative number

Amount financed, interest rate, and the term, are all isolated as assumptions. One or more assumptions can be changed


The FV function

Returns the future value of a series of payments For example, contributions to your 401K or IRA

Based on: Number of periods Expected rate of return Amount invested each period


Using the FV Function

Amount of contribution, rate of return, and years contributing are all expressed as assumptions


Inserting a Function

Use the Insert Function command from the Insert menu

Use the list box to select the name of the function Functions are categorized

Let the Wizard help you enter the arguments Point to enter cell references Use the Collapse button to collapse the dialog box


The Function WizardEnter arguments into text boxes

Collapse button shrinks dialog box if necessary

Value returned by the function (answer) is displayed


The Goal Seek Command

Allows you to set an end result and vary the inputs (assumptions) to produce that result Only one input can be varied at a time

All other assumptions remain constant For example, set a desired monthly car payment

Vary the amount financed Interest rate and number of months remain the same


Using the Goal Seek Command

Enter the cell containing the desired result

Enter the desired value

Enter the cell containing the desired result


Hands-on Exercise 1

Title of Exercise: Basic Financial Functions Objective: To illustrate the PMT and FV

functions; to illustrate the Goal Seek command. Input file: None Output file: Basic Financial Functions


Developing Proficiency

Use relative and absolute references correctly Use relative cell references if the value will change when a

cell is copied Use absolute references if the value remains constant

(typically assumptions) Mixed references

Use when either the row or the column will change Isolate your assumptions

Formulas in cells refer to the assumptions area, not to the actual values


Using Mixed References

Mixed references used for number of payments, rate of return

Absolute reference used for amount of contribution


Hands-on Exercise 2

Title of Exercise: Advanced Financial Functions

Objective: To use relative, absolute, and mixed references in conjunction with the PMT and FV functions; to practice various formatting commands. Input file: None Output file: Advanced Financial Functions


Statistical Functions

MAX, MIN, and AVERAGE functions Return highest, lowest, and average values from

an argument list Argument list may include cell references, cell ranges,

values, functions, or formulas Cells that are empty or contain text are not included

COUNT and COUNTA functions COUNT returns number of cells containing

numeric entries or formulas that return a number COUNTA also includes cells with text


Using Functions versus Formulas

In general, use functions instead of formulas Functions are adjusted as rows or columns are

deleted or added within the range referenced by the function

With formulas Adding a row adjusts the cell references in the formula,

but does not include the new row in the formula Deleting a row causes a #REF error message


The IF Function

Enables decision making in a worksheet Requires three arguments:

A condition A value if the condition is true A value if the condition is false

Condition must be able to be evaluated as true or false Uses relational operators (=, <, etc.)


Using the IF Function Incorrectly

Value_if_true entered as a conditional test. Function will return True or False


Using the IF Function Correctly

Value_if_true entered as a value. Value_if_false entered as a cell reference


The VLOOKUP function

Allows Excel to look up a value in a table and return a related value

Requires three arguments: the numeric value (or cell) to look up the range of the table the column number containing the value you want

to return


Using the VLOOKUP Function

This argument tells the function where to look. Absolute references used for the table

Look in the second column of the table, NOT in column J

Look up the value found in cell I4, in this case, the semester average


Working With Large Worksheets

Scrolling causes the screen to move horizontally or vertically as you change the active cell Drag the horizontal or vertical scroll bars Click above or below vertical scroll bars Click to the left or right of horizontal scroll bars

Freezing Panes allows row and column headings to remain visible while scrolling

Hiding rows and columns makes rows and columns invisible on the monitor or when printed


Freezing Panes

As you scroll back up, rows 4-8 will become visible again


Printing Large Worksheets

Page Preview command (View menu) lets you see where the page breaks are

Page Setup command (File menu) lets you change how the sheet prints Change from portrait (8 ½ x 11) to landscape (11

x 8 ½) Change margins Scale the worksheet to print on one sheet


The AutoFilter Command

Allows you to display a selected set of rows within a worksheet Displays rows that meet selected criteria Other rows are hidden, not deleted

Select Filter then AutoFilter from the Data menu

Select criteria from the dropdown


Using the AutoFilter CommandClick the dropdown on the Homework column, then select Poor as the criteria


Hands-on Exercise 3

Title of Exercise: The Expanded Grade Book Objective: To develop the expanded grade

book; to use statistical (AVERAGE, MAX, and MIN) and logical (IF and VLOOKUP functions); to demonstrate scrolling and the Freeze Panes command Input file: Expanded Grade Book Output file: Expanded Grade Book Solution


Summary

Financial functions (PMT and FV) Goal Seek enhances decision making Statistical functions (MAX, MIN, AVERAGE,

COUNT, and COUNTA) Decision making functions (IF, VLOOKUP,

and HLOOKUP) Isolate and clearly label initial assumptions


Summary (continued)

Copy using fill handle Use scrolling & the Freeze Panes command

to work with large worksheets Page Setup controls how the worksheet

prints AutoFilter command displays only rows that

meet certain criteria


End-of-chapter Exercises

Multiple Choice Practice Exercises

Exercise 1 – Calculating Your Retirement Exercise 2 – Alternate Grade Book Exercise 3 – Expanded Payroll Exercise 4 – Fuel Estimates Exercise 5 – The Roth IRA Exercise 6 – Celebrity Birthdays Exercise 7 – The Health Club Exercise 8 – Big Bopper Bank


End-of-Chapter Exercises (continued) Practice Exercises

Exercise 9 – Nested IFs and Other Functions Exercise 10 – Election 2004 Exercise 11 – The Shopping Mall Exercise 12 – Barber Academy Exercise 13 – Excel Jeopardy

Mini Cases The Financial Consultant Fun with the If Statement The Lottery


End-of-Chapter Exercises (continued) Mini Cases (continued)

A Penny a Day The Rule of 72 Study Break – Excel Crossword Puzzle Signs of the Zodiac Chapter Recap – Vacation Time


Questions?

Documents

Exploring Excel 2003 Revised - Grauer and Barber 1 Committed to Shaping the Next Generation of IT Experts. Chapter 4: Spreadsheets in Decision Making: